Food Security Graduation Model
Dear Participants,
This Food Security Graduation Model was presented in the Rural and Agricultural Finance for Food Security Primer. It indicates that the food insecure individuals and households go through a process where at various stages different financial services are required to enable their graduation from chronically food insecure on to vulnerable to food insecurity and then finally to a stage where they have sustainable livelihoods and can be food secure.
To kick-off this conversation we’d like to start by putting out the following questions:
- From your experience how would you order the different financial services to graduate a client to food security?
- Among the various interventions where do you see the maximum impact?
- What are the main challenges in consistently applying the model on the field?
- This model emphasizes on lifting the very poor from chronic food insecurity – how would you change this model to address transitory food insecurity (eg. Temporary food insecurity owing to natural disasters, civil strife etc.) ?
Please share your comments and experiences.
Best regards,
Rashmi Ekka
I see that the model has taken into consideration some of the challenges we faced in the field while implementing programs to ensure livelihood security. Our experience over the years demonstrates that as soon as "hunger strikes" a community or family, changes start taking place. The first being the migration of able bodied persons from the village to the towns in search of employment. This leaves many dependents without proper security and a manner in which they can fend for themselves. Many families are also unable to cultivate due to the lack of in-house labor and also do not have surplus funds to pay outsiders. In some countries there are still members of communities that donate their time to prepare, cultivate and harvest in turns. However, we have found that this social responsibility is dwindling and may soon disappear.
The model demonstrates that soon after identification of clients, consumption support is envisaged. This is a reality as many families are poor. However, as mentioned in my first submission, all forms of financing should be channeled through either local groups or Producer Organizations (POs).
We have found that savings services are not always needed at the start of the process. Most families cannot benefit from it, as they are too poor to save. We found that obliging them to save before receiving loans, especially in post conflict/disaster was retarding them re-start their lives. However, soon after harvests (or when they made profits from enterprises) they have been willing to set aside 10 to 25% of their profits and we have been able to capture it. Therefore, we feel that savings services should be introduced later in the process. We developed a model to provide first and second loans without tying them to savings. However, if the clients requested a third loan they had to deposit 10% of the value of the loan as savings.
- From your experience how would you order the different financial services to graduate a client to food security?
Financial services should commence with consumption loans and sufficient funds to cover expenses until the harvest such as purchase of seeds and tools and other materials. There should also be loans or services provided on credit for sales/marketing of produce. Skills training needs to be provided nest in order that farmer families adopt best practices to assure maximum yields. As soon as the harvests are available, other services such as savings and MicroCredit and Micro Insurance could be introduced.
- Among the various interventions where do you see the maximum impact?
The maximum impact is when consumption loans and funds/loans for purchase of materials and payment of labor are provided.
- What are the main challenges in consistently applying the model on the field?
There could be challenges if a livelihoods baseline assessment and if needed an ethnographic study, is not carried out to know the aspirations of the target group before interventions are started. This is because different communities have different ways in resolving their challenges related to food security. .
- This model emphasizes on lifting the very poor from chronic food insecurity – how would you change this model to address transitory food insecurity (eg. Temporary food insecurity owing to natural disasters, civil strife etc.) ?
What I mention above is applicable to communities that have been stricken by war or natural disasters.
Thank you,
Sunimal Alles
Consultant, Conflict resolution and Livelihoods
Sri Lanka.
Skype: sunimal.alles
While I find agreement in much of what you have posted Sunimal, I would take some exception to the statement that the poor are too poor to save as evidence from various savings group models might suggest otherwise.
Depending on a level of poverty, the poor can save although what they save may be of little use to them initially for financing working capital investments in their enterprises.
Some would argue further that the provision of safe, secure savings instrument for the poor would be success enough...at least for a start.
Thanks for the great comments!
Terry Isert
Microenterprise/Microfinance Consultant
Email: terryisert@yahoo.com
Phone: (612) 607-3910
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I agree that the poor can save. However we have found that they needed to be enticed to do so within groups in many instances. They had grains, animals and also little sums of money tied to their clothes or hidden in boxes or holes in the ground under their beds, which were savings. We found that they hold on to the savings as they had been cautioned against trusting others with whom they could join and start savings clubs/groups. Some families that had lost their savings, due to theft or government policies of closing savings accounts, especially in post office savings schemes were also hesitant to save. We found that some savers had trusted their leaders and not carried out audits of their transactions, which resulted in loss. Some did not wish to save as there was conflict within the community. The comment that they were "too poor to save" was made by a certain number of poor families when we tried to facilitate the organization of Savings and Investment groups and Value Chain Associations.
However, when we carried out sessions to verify their hesitance, they came up with the above. We then facilitated sessions to demonstrate the manner savings could enable them to become not poor in order to organize the S&I and VCA groups and cooperatives. (i.e. having at least one or two members of groups that were literate to keep records and audits, no members of the same immediate family in the same group, saving and providing loans for investment, not keeping money in a "box" in the home or group, audit of transactions, electing office bearers every year, nominating trustworthy persons with leadership traits to form village level cooperatives, consolidating savings, depositing a portion of savings in a MFI/Bank that was willing to provide loans, obtaining loans to expand agriculture value chains and rural enterprises)
A strategy that worked with poor families and HIV +ve persons in DR Congo was when we provided first loans of $10 through Advisory Centers for Better Living (ACBL) where a package of services/advice was offered to identify their talents/strengths and the related activities they could carry out, investment options and a fortmat used to engage them to invest and make profits to enhance livelihoods. Once they reimbursed their first loans and received a second loan of $20, they were informed that they needed to save 10% of the value of the next loan to have access. (i.e. $ 3 to $5) This worked out very well. Some families opted to save while others said they did not wish to increase their loans sizes as they feared pillage of their assets and money, as they lived in very insecure areas.
Thanks,
Sunimal Alles,
Consultant Conflict Prevention and Livelihoods,
MATCOS,
Sri Lanka.
Skype: sunimal.alles
I second Terry's posting. Our experience - and the documentation in the book "Portfolios of the Poor" - shows how important savings is for the poor who cope with such fluctuating incomes.
I met a villager in Burkina Faso who complained that his savings were being eaten away. I figured he meant inflation. He said - no - really - the termites are eating the cash I put under my mat.
A tin box represented a breakthrough in savings technology.
We've also seen how powerful investment by the poor can be. We did a series of fish farms in Bangladesh - some with grants, some with loans, some only with local share offerings. The less money we put in from outside, the higher the likelihood they were still in business a year later.
John Coonrod, The Hunger Project
This is a really interesting lens at which to look at this issue- thanks for posting!
Looking at potential activities in a stepwise fashion makes a lot of sense and can ensure participants can make the most of them and programs are effective as possible. One challenge I would think in consistently applying the model is that it depends where people are at when you start. For instance people come it at different points of need under chronic and vulnerable to food insecurity so if you were starting a program for instance with those that are vulnerable to food insecurity, you would still want to ensure some of the savings services, skills and assets support were in place already and might need to start with those or bring them in concurrently before going into micro-credit and micro-insurance. Also, some of them would need to be continually incorporated into programming for the vulnerable to food insecurity as well such as skills training, savings even as incomes rise.
I realize this is hard to capture in a linear picture but could be interesting maybe to think about-- could more be added under sustaining livelihoods and integration of activities? Another challenge might be the timeline- this would change a lot depending on the context and may need to be adjusted and extended.
Best,
Meaghan
QED Group
